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GCG waiting for LANDBANK, DBP positions on proposed merger

Courtesy: Land Bank of the Philippines

THE GOVERNANCE Commission for GOCCs (GCG) is waiting for the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) to submit their positions to evaluate the proposed merger of the two lenders.

“At this stage, GCG is still evaluating the situation and we are waiting for all stakeholders to submit their position so that nobody will be left behind… Due process is required under our constitution,” GCG Chairperson Justice Alex L. Quiroz said in an online webinar.

“We have no final recommendation yet but [we’re] still waiting for the positions [from stakeholders] whether [they are] for merger or not,” Mr. Quiroz said.

The GCG, which oversees government-owned and -controlled corporations (GOCCs), earlier said it had the authority to merge both state-run banks without legislation, citing a Supreme Court ruling.

Last week, Finance Secretary Benjamin E. Diokno said that Malacañang may issue an executive order approving the merger, which would allow the two state banks to be legally merged by November.

LANDBANK Senior Vice- President Elcid C. Pangilinan said during the same webinar that as a government-owned financial institution, the bank will stand by what their chairman Mr. Diokno proposed.

“We will only abide by the approvals of the Office of the President, the GCG, and what our chairman would like to propose. The proposal of our chairman is for the merger of the two banks. I think that’s the only position that we have,” Mr. Pangilinan said.

Once combined, LANDBANK and DBP will have an asset size of P4.185 trillion and deposits of P3.588 trillion, according to data from the Finance department.

Mr. Diokno earlier said LANDBANK would be the surviving entity from the merger.

“With all due respect to the GCG and LANDBANK, we submit our position that we oppose the merger on legal grounds,” DBP Senior Vice-President Ted Fernandez said.

The DBP has been strongly opposing the proposed merger, noting that having just one large “superbank” could endanger the economy in the event of a bank failure. It may also render thousands of DBP employees jobless.

At the webinar, the GCG’s Mr. Quiroz said there may be a delay in the process as they have to carefully classify the restructuring of the banks’ human resources.

A technical team from the GCG is currently working with the GOCCs involved to calibrate the positions and classification of the banks’ workforce, he said.

“They have to take into consideration the numerous employees that they have to reevaluate for reorganization. Perhaps that could be the delay… We are trying our best to be on time. I cannot afford [any] delay in our office,” Mr. Quiroz said.

In March, President Ferdinand R. Marcos, Jr. gave the go signal for the merger.

The merger aims to consolidate resources, simplify transactions with counterparty banks and multilateral lenders, and enhance efficiency. It will also serve as the sole authorized government depository bank.

The government is also estimated to generate up to P975 million in savings annually due to the consolidation of the banks’ operations and cuts in personnel expenses. — K.B. Ta-asan

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